Seabound: Charting a Course to Decarbonize Shipping
We are thrilled to share the news of our most recent investment in Seabound, a groundbreaking company we first encountered during their time at Y Combinator. Our initial investment in the business was made through our Shared Future Fund in 2022, and since then, we’ve been closely monitoring their impressive progress.
If you’re not yet familiar with Seabound and their work, we invite you to watch this behind-the-scenes view of their first pilot:
In addition, we’ve included a brief Q&A from our recent conversation with Founder and CEO Alisha Fredriksson, providing valuable insights into their vision, mission, and the unique challenges they’re tackling.
How did you become interested in carbon capture, and why focus on shipping?
Prior to founding Seabound, I helped build another startup called Liquid Wind that makes carbon-neutral fuel for ships out of captured CO2 and green hydrogen. As we looked to scale this clean fuel, it was ironically difficult to find accessible and affordable sources of CO2 for its production. This led to the founding insight for Seabound: could we capture CO2 directly onboard ships, sell that for clean fuel production, and eventually facilitate a circular fuel system?
This was such a meaty and compelling question that my cofounder, Roujia, and I quickly quit our jobs to dive right in and explore it.
From an impact perspective, there’s a tremendous opportunity in decarbonizing shipping because it currently emits over a billion tons of CO2 annually (even more than aviation) and lacks other viable solutions. While there’s hope for clean fuels to reduce emissions in future, these are still 10-20 years away from being in sufficient supply and unlikely to help the existing 50,000 merchant ships that are on the water today.
How does Seabound’s carbon capture technology work and what makes it unique?
Seabound’s carbon capture technology diverts a ship’s exhaust gas into a container full of small pebbles of calcium oxide, which chemically react with CO2 in the exhaust gas to form calcium carbonate. In other words, we make limestone onboard ships, effectively locking the CO2 into small pebbles. When the ship returns to port, we offload the limestone and either: 1) sell it for use as a building material, or 2) recycle the pebbles to separate the CO2 from the calcium oxide so that we can reuse the calcium oxide to capture more CO2 on another ship, and then sell the pure CO2 for clean fuel production or geological sequestration.
Seabound’s carbon capture technology diverts a ship’s exhaust gas into a container full of small pebbles of calcium oxide, which chemically react with CO2 in the exhaust gas to form calcium carbonate.
Our process is unique because we only capture the CO2 onboard and leave it locked in limestone, rather than trying to separate and liquefy the pure CO2 from the limestone onboard as well. These steps of separation and liquefaction are typically the most complicated, expensive, and energy-intensive for carbon capture technologies, which is why we’ve shifted them to shore where we can leverage economies of scale and land-based energy infrastructure.
In your opinion, what is the most counterintuitive or misunderstood aspect of the shipping industry’s role in global emissions, and how do you address this misconception when discussing Seabound’s mission with potential partners, investors, or customers?
Shipping is often considered one of the last, hard-to-abate sectors, however I like to think that it has a number of ingredients that could make it, counterintuitively, “easy-to-abate”.
For instance:
- Shipping has relatively few highly-emitting assets to decarbonize. Specifically, there are ~50,000 ships in the world that emit over 1B tons of CO2 cumulatively each year, or ~20,000 tons of CO2 each. (In comparison, there are ~1.5B cars in the world that emit ~3.5B tons cumulatively each year, or ~2.3 tons each.)
- Shipping transports ~90% of the world’s goods, which means that most industries will require (and increasingly demand) ships to decarbonize in order to reach their net zero targets.
- Shipping is uniquely governed by a global regulator (given its inherently global nature), which has put ambitious mandates and measures in place for ships to reduce their emissions. Engineering standards and certifications are also internationally regulated, which makes it easier to design, manufacture, and scale up an engineered product like Seabound’s.
- Shipping consists of efficient logistics hubs, which can be leveraged to move captured carbon and carbon-capturing materials to off-take locations for utilization or sequestration (this can be a challenge for certain land-based CCUS applications).
- Most assets in shipping are financed (given their high value), which means that there’s significant potential for green financing mechanisms to accelerate the transition.
Of course, I’m acutely aware that decarbonizing shipping is not without its challenges, but these are just some of the reasons why I think the industry could be easier to abate than expected once we start scaling the right technology. This isn’t a message that I’ve been too vocal about yet (as we’re still building that technology as we speak!), but it’s one that I hope will resonate with future mission-driven team members, partners, and investors.
What do you hope to see in the future of the shipping industry?
In the next 10 years, I hope to see carbon-negative ships on the water, which would be pretty magical for an industry that is today considered pretty “dirty”. If we capture carbon on ships that are burning biofuel and then store that CO2 permanently, we could transform those ships from being hard-to-abate and heavily-emitting to being fully sustainable and carbon-rebalancing.
If you could invest in one other startup working in the broader climate technology space, which would it be?
It’s hard to pick just one, but a fellow transport startup, Revoy, comes to mind. They recently launched their electric vehicle, which quickly hooks up to a diesel semi-truck to make it hybrid-electric. This reduces the truck’s emissions and reduces its fuel costs, effectively creating a “green discount” versus a much more common green premium. I like that it’s a creative and pragmatic solution to reducing emissions in another conservative industry and, of course, that it pays for itself. We were actually in the same group at Y Combinator as Ian (Revoy’s Founder & CEO) in the winter of 2022 so it’s exciting to see how far he and his team have come since then!
Who is one of your heroes / role models? How has this person impacted your life?
I’ve long been an admirer of Dr Ayana Elizabeth Johnson, a marine biologist, policy expert, and writer, who’s based in Brooklyn. She seems to have an endless amount of energy for taking on new climate projects and has effectively straddled multiple sectors, disciplines, and channels for change, all while welcoming people to get involved in tackling the climate crisis. For instance, she co-founded the Urban Ocean Lab and wrote the Blue New Deal plan, co-hosted the NPR podcast “How to Save a Planet” (a pillar in my climate education journey pre-Seabound), co-edited the book “All We Can Save” and co-founded an organization by the same name, and much, much more.
Through her body of work (and famous TED talk), Dr Ayana has reminded me that there is tremendous joy to be had in creating solutions to the climate crisis (as much as it can feel insurmountable or overwhelming at times) and that there is an instrumental role for us each to play in curbing this crisis if we’re up for the challenge.
What are the pros of building a business in London?
I’d say the first pro is that London has not only a strong existing talent pool, but also strong potential to attract world-class talent into the city. There’s a number of top universities in the city or nearby at Oxford and Cambridge, from which we’ve been able to recruit top engineering talent. We’ve also hired a number of key team members from abroad who quickly relocated to London to join Seabound because it’s not hard to convince someone to live here.
As a major international capital, it’s easy to meet potential partners in the city because many global corporations have offices here and because people are always visiting London for various reasons. When you do need to meet people elsewhere, it’s easy to travel anywhere from London, which for me has been helpful to meet with shipping companies across Europe or in Asia.
More specific to shipping, the industry’s regulators and banks are based here so London is a prominent hub for many stakeholders in the industry.
Finally, London is a city of ambitious people and many fellow founders so it’s a fun ecosystem to be a part of!
If you had a magic wand, and could partner with any company or organization in the world, who might that be?
I think PSA International could be an instrumental partner for us. They are the world’s largest port operator, with 60+ terminals across 40+ countries. If we can collaborate so that they’re both familiar with the Seabound system and they incentivize shipowners to use it (e.g. via reduced port fees for greener ships arriving at their terminals), we could scale much more quickly across many locations.
Why is now the right time for Seabound to succeed?
Now is the time for Seabound to succeed because brand new global regulations and increasing demands for green shipping from customers and shareholders have placed shipping firmly in the climate hot seat.
Most notably, the International Maritime Organization introduced new mandates in June 2023 for the industry to reach net zero greenhouse gas emissions by around 2050, and the European Union added shipping to its Emissions Trading System from January 2024 onwards.
Furthermore, the industry transports 90% of the world’s goods, which means that any companies looking to reach their own net zero targets will require green shipping to reduce their supply chain emissions.
How do you plan to use the funds raised in this financing round to advance the business?
We plan to use these funds to accelerate product development and commercialization. Following our recent successful pilot with Lomar Shipping and lomarlabs, our lean team has been hard at work building a bigger and better carbon capture device and preparing pre-orders with shipowners and customers. We plan to deliver the first commercial Seabound systems from 2025 and this extra support from Collaborative Fund enables us to grow our engineering team and build our commercial and operational functions to deliver on that ambition.